PERTH (miningweekly.com) – Junior gold miner Red 5 has reported higher output in the September quarter, with its King of the Hills (KOTH) mine progressing on schedule and within budget.
Red 5 on Tuesday reported that 16 377 oz of gold was produced during the September quarter, up from the 15 251 oz in the June quarter, with ore sourced from the Darlot underground mine and Great Western openpit.
Production was in line with budget, reflecting the completion of a scheduled cutback to the Great Western openpit during the quarter.
All-in sustaining cost (AISC) was A$2 686/oz, compared with the June quarter AISC of A$2 461/oz, which was in line with budget, and included the completion of a scheduled cutback to the Great Western openpit at a cost of A$390/oz.
“Red 5 marks the completion of the first quarter of 2022 with our business in a solid position and the company firmly on track to continue its growth trajectory to become a midtier Australian gold producer once we commission our flagship KOTH gold project next year,” said MD Mark Williams.
"The September quarter was another busy and successful period. Most importantly, we continued to make substantial progress towards the construction of our new 2.4-million-ounce, 16-year life-of-mine operation at KOTH, with key developments during the September quarter including the initial assembly of the semi-autogenous grinding mill and carbon-in-leach tanks and substantial groundwork. At the end of September, the overall project was over 65% complete, with key items underway including the installation of the mill and crusher.”
Williams said on Tuesday that considering the current rising cost environment in the Western Australian resources sector and the tight market for labour and services, Red 5 was in a great position with the majority of its long-lead items already on site.
“We continue to hit key milestones, and we are on track to achieve first gold by the June quarter 2022,” he added.
During the quarter under review, Red 5 also unveiled a new mine plan for the Darlot operations as part of its KOTH processing hub strategy, which is premised on the scale, efficiency and low-cost base of the processing plant it is constructing at KOTH. This will allow the Darlot underground mine to transition to become an additional medium-term, high-grade feed source for KOTH from the June quarter 2022.
“This will facilitate a step-change in production cost and has also allowed us to execute a contract with underground mining specialist Redpath to undertake 12 months of underground mine development at Darlot. In parallel, this facilitates an important workforce transition strategy for Darlot’s non-mining and processing personnel to relocate to KOTH and leverages the strategic strengths of the new KOTH operation.
“In future, the KOTH Processing Hub will be fed with three ore sources, the KOTH openpit, KOTH underground and Darlot underground. This will further de-risk the KOTH ramp-up and also alleviates labour force pressures given the transfer of our highly skilled Darlot surface team to KOTH.
"We also completed the sale of the Siana gold project in the Philippines with the up-front cash consideration of $19-million received in September 2021, strengthening our balance sheet and consolidating our position as an emerging Western Australia midtier gold producer.”